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Wall street analysts feel good about one of our retail stocks but apprehensive about another. The news on Home Depot Telsey Advisory Group, a leader in retail industry analysis, upgraded Home Depot stock to a buy-equivalent outperform on Friday. The research firm also increased its 12-month price target to $455 per share from $360, implying nearly 14% upside from Thursday’s close. Home Depot is set to report third quarter results before Tuesday’s opening bell. HD YTD mountain HD stock performance year-to-date. While anticipating “continued softness” in Q3 sales, Telsey, analysts are forecasting strong earnings and revenue growth in 2025 — driven by lower mortgage rates, continued hurricane recovery efforts, and easier comparisons versus high demand from the post-pandemic period. These catalysts combined with Home Depot’s strong business fundamentals, should continue to help the company gain market share in home improvement, Telsey analysts said. They highlighted further growth in the company’s pro business that supports bigger and more complex projects. Telsey sees Home Depot outperforming the S & P 500 in 2025. Shares this year have gained nearly 17% — currently underperforming the benchmark index’s more than 25% advance in 2024. Big picture Telsey’s increased confidence in Home Depot comes against a backdrop of economic resiliance and moderating inflation. The Federal Reserve’s monetary policy easing, which included another interest rate cut Thursday, should lead to cheaper mortgages and a stronger housing market. Homebuilders rely on Home Depot and so do new homeowners working on renovation projects. Home Depot shares rose more than 2.5% this week in the overall market rally sparked by the quick resolution of the presidential election. The stock has largely been on the upswing since disappointing earnings and guidance in August. Bottom line Jim Cramer has argued for months that Home Depot will be a prime beneficiary of Fed easing. However, stubbornly high bond yields before Thursday’s rate cut pushed out that catalyst because mortgages were being held higher. During Friday’s Morning Meeting, Jim said Home Depot stock could eventually reach Telsey’s price target of $455 given there’s a lot to like about the company right now. The Club price target stands at $420. To be sure, there’s usually a six-to-nine-month lag after the first Fed rate cut, which was in September, to when the housing market should see improvement. That means investors must be patient. Jim said he does not want people to sell Home Depot stock when they see next week’s earnings. While acknowledging they’re “not going to be great,” he stressed, “It’s going to be the outlook that matters.” The news on Best Buy Citi lowered its Best Buy price target to $109 per share from $115 on Friday while maintaining its buy-rating on the stock. BBY YTD mountain Best Buy stock performance year-to-date. The analysts argue that President-elect Donald Trump’s promised China tariffs are a “near term overhang” for Best Buy, a retailer with massive exposure to imports from the world’s second-largest economy. It’s not all bad. Citi said the artificial intelligence-driven tech replacement cycle, which should boost earnings and same stores sales as customers turn to Best Buy to upgrade smartphones and computers, “remain intact.” Big picture Under Trump, higher tariffs, particularly against China, are expected to be a part of his economic playbook. Any new tariffs on Chinese imports would be a challenge for Best Buy since much of the electronics retailer’s inventory is manufactured in China. Shares of Best Buy have dropped about 2.5% this week. Ahead of the election, we trimmed our Best Buy position — locking profits after the stock rallied from its Aug. 5 low on rate cut optimism. Bottom line Despite Citi’s concerns, we’re sticking with Best Buy. We still believe the tech replacement cycle is a tailwind for the retailer as consumers seek to buy the latest AI-driven gadgets. Best Buy should be well-positioned to benefit from falling interest rates if home sales pick up again. That would drive purchases of appliances, TVs, and big ticket items that Best Buy sells — much like we believe it would for Home Depot and its home building and home improvement products. Best Buy reports quarterly results on Nov. 26. (Jim Cramer’s Charitable Trust is long HD, BBY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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Wall street analysts feel good about one of our retail stocks but apprehensive about another.